‘Housing is Broken’ – John McManus Tells Hive Conference

John McManus

AUSTIN – (By Ralph Bivins, Realty News Report) – The nation’s housing market “is broken” because buying a new home is not an attainable goal for many middle-class Americans, according to national housing expert John McManus, vice president and editorial director of Hanley Wood’s residential group.

Millions of new jobs have been created in recent years, McManus said, with the typical wage about $65,000 per year. But for the most part, the home building industry has been unable to build homes that are affordable for these people, said McManus, speaking at Hanley Wood’s Hive Conference in Austin recently.

“Housing is broken because businesses – when they add up what they have to pay for land, fees, people, materials, and capital – are finding their margins bend toward non-viability,” McManus said. “Housing is broken because the only housing builders, developers, architects, distributors, and investors can build right now profitably is unaffordable to people who earn average salaries, take home median wages, live normal lives. Housing is broken because the only way that housing becomes affordable is to wait 25, 30, 40 years, when the new housing today is old, used, in need of repair. We have to change that.”

The housing that would be appropriate for average families is being called “The Missing Middle.” Through thoughtful design, architects and builders have been creating shelter that addresses the moderate-priced segment.

“Housing is broken because there are more people housing-overburdened than ever before, and that number keeps growing,” McManus said.

In many ways, it seems like the housing market is in the same place now as it was 30 years ago, said another Hive conference speaker, Chris Herbert, managing director of the Harvard Joint Center for Housing Studies. Thirty years ago, the home ownership rate was down and rental rates were up. And the same basic conditions exist today, Herbert said.

RNR

Texas-based RealtyNewsReport.com covers regional and national news of significant trends and transactions in commercial and residential real estate. The publication was founded by Ralph Bivins, an award-winning journalist with extensive experience in print, broadcast and online media. Bivins recently received a number of awards in the 66th Annual National Association of Real Estate Editors Journalism Competition.